US Fed Holds Interest Rates Steady; Global Markets Stay Calm

The US Federal Market Open Committee (FOMC) meeting kept interest rates steady in the US, largely on worries over global conditions and on inflation continuing to remain low.

"The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen some further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term," the FOMC said in a statement.

"Recent global economic and financial developments may restrain economic activity somewhat and are likely to put further downward pressure on inflation in the near term. Nonetheless, the Committee expects that, with appropriate policy accommodation, economic activity will expand at a moderate pace, with labor market indicators continuing to move toward levels the Committee judges consistent with its dual mandate," the statement released last night said.

The US Feds also hinted at accommodative policy staying easy in the US even after the first hike takes place.

"The Committee currently anticipates that, even after employment and inflation are near mandate-consistent levels, economic conditions may, for some time, warrant keeping the target federal funds rate below levels the Committee views as normal in the longer run."

The FOMC meet was the most eagerly anticipated event of the year, as markets were worried of there would be an interest rate hike in the US.

Most Asian markets were having a quiet session in trade today digesting news of the Fed status quo on interest rates.